Today’s Rumors Mill looks at what the economists surveyed by the WSJ have to say about the current economic state, and how useful their information really is;

The most important economical indicator, the ‘08 GDP, was forecast 1.1% annual growth, down from 2% in January, with big gains in Q3, probably from the 600$-tax rebate. Even if a recession probability is not too high in 2008, 40% of the economists see a 70% probability of recession in 2009. Again, 76% of the economist think that we are in a recession right now, and 73% do not see that the bottom has yet been hit.

The same economists see the unemployment rate going up to 5.6%. The Fed Fund’s average for 2008 is at 1.80%, down from 3.65%, the January estimate.

The housing market prices were revised for the 8th time, downwards, with a 5% loss in ‘08 and continuing through ‘09.

These economists have contrarian opinions. They think now we are in a recession, but the probability of ‘08 recession is 40%, while 70% of them see a recession in ‘09, but at the same time, they see growth picking up in Q3 and Q4 of 2008.

Most importantly, many of their estimates were lowered in the last few months, and probably they’ll do the same when things are getting better; by raise their estimates. Their views are not too useful over the long term it would seem, but they are important now, because many of these economist form an important piece of an Institution’s Trade Desks, and at the most important financial firms in the world they have the ability to move markets.

TheLFB Team & The View From Afar Blog

Trade Desk View

Fundies and Trading
There is a constant question from some traders as to why anybody would ever need to consider the ‘F’ word when trading. Fundamentals: what is so damaging at looking at both Technical charts and having a Fundamental filter to gauge how many Lots to put on? Why is it that accepting that Technicals give us price points to trade, but Fundamentals determine the direction that we travel is so difficult for some traders to accept? Without a Fundamental Filter very few pure Technical traders would have seen this Dollar move coming today.